Monday, December 14, 2009

One Week, Two Big Pieces of Ebook News

Posted by Victoria Strauss for Writer Beware

Last week, the publishing world was abuzz with news that Simon & Schuster, Hachette, and HarperCollins intend to delay the release of ebook versions of most of their hardcover titles by three or four months, rather than releasing the ebooks simultaneously with hardcovers (this delaying process is known as "windowing," and publishers have historically used it to separate hardcover and paperback editions, allowing the more expensive and therefore more profitable hardcover to build sales before issuing the cheaper paperback). According to Carolyn Reidy of S&S, "The right place for the e-book is after the hardcover but before the paperback."

Predictable outcry ensued from ebook enthusiasts, and just about anyone with a beef against large commercial publishers. S&S, Hachette, and Harper were accused of being dinosaurs, of shooting themselves in the foot by alienating readers, of trying to delay ebook adoption out of fear or greed, of clinging to processes and categories that the digital age, young as it is, has rendered obsolete.

There were also more nuanced responses. Jane Litte at Dear Author provided a fact-filled survey of windowing arguments. Ron Hogan at GalleyCat also looked at the arguments, observing that "if you want to create an enduring hardcover-digital-paperback cycle, you need to convince readers, especially digital-embracing readers, that this cycle offers them genuine value". Very interesting was Mike Shatzkin's speculation that, rather than wallowing in the dustbin of publishing history, the publishers are actually attempting to curb the might of Amazon, and take back control of ebook pricing. And I agree with this comment from Craig Morgan Teicher at eBook Newser:

Underlying these questions is the deeper question of what exactly an eBook is relative to a hardcover: is an eBook, like a paperback, a cheaper version of a hardcover? Or is it something entirely different, a new format for which there is no precident in previous publishing models?

Which segues nicely into the second big piece of ebook news that broke last week. As reported by PW and the New York Times, Markus Dohle of Random House sent a letter on Friday to dozens of literary agents, claiming that the company’s older contracts give it the exclusive right to publish in ebook form, even where the contracts pre-date the existence of digital formats and/or their language does not mention electronic rights. From the letter:

Our older agreements often give the exclusive right to "publish in book form" or "in any and all editions"...Such grants are usually not limited to any specific format, and indeed the "form" of the book has evolved over the years to include variations of hardcover, paperback, and other written formats, all of which have been understood to be included in the grant of book publishing rights...Whether physical or digital, the product is used and experienced in the same manner, serves the same function, and satisfies the same fundamental urge...Accordingly, Random House considers contracts that grant exclusive rights to publish "in book form" or "in any and all editions" to include the exclusive right to publish in electronic book formats.

The claim appears to have been spurred by RH's efforts to digitize its backlist (and also, no doubt, by the accumulating evidence that electronic rights are on track to become extremely valuable--something that, pre-Kindle, was not at all apparent). The Times also speculates that RH is concerned about competition from startups like Open Road Integrated Media, which has signed agreements to produce ebook versions of the work of RH's William Styron, among others.

RH's use of the terms "in book form" and "in any and all editions" suggests that it considers e-rights to be part of the primary grant of rights (since that's typically where these terms occur). An argument can be made against this, since many publishing contracts treat them as a subsidiary right, possibly to be negotiated separately (for instance, my most recent contract with Harper required the publisher to come back to the negotiating table if it decided to license or exercise e-rights). Also of concern: there's no wording in pre-digital contracts to address the rights reversion problems posed by always-in-print electronic editions. Unless that's dealt with in whatever addendum or amendments RH plans to offer to authors with older contracts, those authors may find it extremely difficult ever to regain their rights.

This is actually the second time RH has attempted to lay claim to electronic rights in pre-digital contracts. In 2001, a number of authors (including Mr. Styron) signed ebook contracts with epublishing startup Rosetta Books, reasoning that, since their contracts pre-dated the existence of ebooks, they could dispose of e-rights as they chose. RH filed suit, with the same claim it's making now: that the right to publish "in book form" includes not just print, but digital, and Rosetta was therefore committing copyright infringement.

The courts did not agree. RH's request for a preliminary injunction was denied by a federal judge, who ruled, on the basis of RH's own contract language, that "the right 'to print, publish, and sell the work[s] in book form'...does not include the right to publish in the format that has come to be known as the 'ebook.'" (An analysis of that decision can be found here.) An appellate court, to which the decision was appealed, agreed. The parties eventually settled, with Rosetta agreeing to pay licensing fees to RH.

So what does it all mean? Are ebook delays, and RH's electronic rights grab, part of the painful but necessary experiments that accompany all paradigm shifts, or the death throes of dinosaurs? In the discussion of ebooks, ebook readers, and digital issues in general, there's much that's murky--but the one thing that is very clear, at least to me, is that no one knows exactly where any of it is going. Plenty of people think they do--especially those who daily declare the imminent death of publishing as we know it. But prognostication only serves itself, since in the end, most of it turns out to be bunk.

Personally, I think it's more interesting just to watch what happens.

11 comments:

Sean McManus said...

There is some merit to the argument that the ebook rights belong with the book rights in older agreements. They compete with each other, and the implied understanding of the book contract is that the publisher was buying the exclusive licence, and not that the author could re-sell the same book to a different publisher at the same time.

That said, ebooks completely change the economics of the industry and ebook royalty rates would be negotiated differently now to whatever was set in the original contract for print titles. It's hard for a fair negotiation to take place as long as the original book contract is seen to bind the author to a particular publisher.

I don't know what a fair solution is. Publishers should be able to protect their investment in a title from being undercut by ebook packagers, but authors should be protected from publishers annexing rights they did not negotiate and enforcing unfavourable terms.

This is probably something that will take an industry-wide movement of authors to resolve, similar to the Google Books Settlement.

Anna Petrakis said...

Considering that these older contracts separate out hardcover, paperback, and even book club rights, with a publisher often having one and not the other, I seriously doubt that there was any understanding that "in book form" implied an exclusive license. This is a retroactive redefinition of rights, i.e. a rights grab, pure and simple.

The obvious counter-offer from authors (aside from suing them) is to say, "okay, if e-books are books, then you have to pay me according to the rate set for hardcover books." I doubt Random House is willing to take it that far.

Victoria Strauss said...

That's an excellent point, Anna (about older contracts separating out rights), and one I didn't think of.

Jill Edmondson said...

I wonder if the world of book publishing can take a cue from the world of music.

Music had had to deal with many changes and on a more rapid scale than has the world of book publishing.

Music has gone from 78 to 33 to 8-track, reel-to-reel, audio cassette, CD, and now digital files.

Movies have also adapted to changing technology - Beta, VHS, DVD and now Blu Ray.

Books have consisted of pages between two covers forever.

In terms of contracts and rights and formats and so on, perhaps publishing can look at how the music world has handled releases in new formats that emerged post-contracts.

Cheers, Jill
"Blood and Groom" is now in stores!
www.jilledmondson.com

JFBookman said...
This comment has been removed by the author.
JFBookman said...

I also thought this issue might rely on the separability of rights. Since each set of rights in the work is often dealt with separately, it seemed a bit high-handed of RH to simply assume a unity of rights (the work in any form) where none exists.

But beside that, it batters credulity to see a company like RH asserting rights in a contract from the 1950s to something that didn't even exist. Around here we call that chutzpah.

Beyond that, Sean McManus is right on the money. Both sides have interests that need to be protected, and one would hope that some new arrangement can be made that doesn't involve years of litigation, which helps no one.

Janny said...

Anna's point is well taken, and it's exactly what I thought when I first read this. "e-rights" should be in the same category as paperback rights, film rights, audio rights...and I always thought they were in most contracts. They're all separate forms of the book, and for RH to try to tapdance into saying, "Oh, no, they're all the same" now when it'll actually PAY them to exploit those rights...it doesn't paint RH in a favorable light, to say the least.

JB

FrancesGrimble said...

My guess is this e-rights grab may actually be tied to the (still not finalized) Google Settlement in some way. There is a clause in the Settlement enabling the parties negotiating it, such as the AAP, to cut separate deals outside the Settlement. These parties are not actually bound by the terms of the Settlement. So, if a publisher has either cut a deal to not allow Google to sell their authors' books as e-books so the publisher can do it, or cut a deal that allows Google to sell those e-books but the publisher gets a better cut of the profits than under the Settlement, a rights grab would be necessary for all those older works.

There is a legal trick of making an assertion in a written letter and then later legally contending the other party agreed just because they did not explicitly disagree, in writing. I'm not the lawyer in my family. But personally I'd advise authors who receive such letters, to have their own lawyers write formal responses saying, "No, you don't own any e-rights according to my old contract and here are the legal reasons." Or at least, have some authors' organization hire a lawyer to write a template letter that different authors can tweak to reflect the slightly differing clauses in their own contracts.

Another interesting question is, what if that author had more than one publisher for different editions of the same book (hardcover versus paperback, or rights reverted but the author then found a different publisher), none of which publishers explicitly bought e-rights?

Frances Grimble said...

By the way, surely with most contracts from the pre-electronic age, the rights have since reverted to the authors according to the terms of the contracts? Surely Random House has not kept most of these books continuously in print? So if the author had the legal right to seek a new print publisher as soon as his or her rights reverted, surely the author still has the legal right to seek a new print publisher, or e-publisher, or no publisher at all?

Victoria Strauss said...

Frances, it's agents who received the letter, not authors.

RH's claim is twofold--first, that the original grant of rights in older contracts includes electronic rights, and second, that this is exclusive. It's designed not just to enable RH to use e-rights, but to prevent authors from selling the rights elsewhere (i.e., to Rosetta Books, as William Styron's estate has done). Presumably, authors or their estates could refuse to sign the addendums that RH will have to issue if it wants to use the e-rights--but RH saying its claim is exclusive means that if RH can't use those rights, no one can.

I don't think this has anything to do with Google. I think it's all about everyone (not just publishers) suddenly waking up to the fact that electronic rights are valuable after all. As I noted in my post, this was by no means clear prior to the tipping point of the Kindle.

Taking a book out of print doesn't automatically ensure a return of rights to the author--authors must formally demand their rights back in order to regain them. If they don't, the rights remain with the publisher, even if it isn't using them. However, those aren't the books we're talking about here. RH is digitizing its backlist--i.e., non-frontlist books that are still in print. I very much doubt it has any interest in digitizing OP books whose authors never got around to reverting the rights.

Frances Grimble said...

Victoria,

Thanks, but. I would not be so sure that Random House, or some publisher(s), is(are) not interested in digitizing OP books whose authors have not gotten around to claiming the rights back. In this climate of interest in e-rights, I personally think that any author who has not claimed reverted rights for an OP book from their publisher would be wise to do so ASAP.